The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

46 . Where necessary, the Emergency Fleet corporation is extending financial as- sistance. Mr. Hurley states that such help is being given in the case of 42 yards. Usually this assistance takes the form of advances on contracts ranging from 10 to 30 per cent of the value of the contract. The money expended on the three government assembling yards to Dec. 1 was $9,651,000. The government maintains a balance of from $1,000,000 to $1,250,000 in banks 'for the account of each of the con- tractors who are constructing these gov- ernment yards. The Submarine Boat Corp. Newark bay. The American International Corp. is contractor for the yard at Hog Island, Pa., and the Merchants Ship- building Corp. is government contractor "tor the plant at. Bristol,..Pa.. .Checks drawn by these contractors on the funds at their disposal are countersigned by representatives of the Emergency Fleet corporation. The contractors, in turn, advance payments of from 10 to 30 per cent to the various subcontractors, such sas the structural shops and the manu- facturers of engines, winches, and gen- eral equipment. Percentage of Profit Allowed The question of price, which held up the standardized ship project for two months during the administration of Admiral Capps, was finally settled .on this basis: A basic cost was deter- mined, to include the cost of construct- ing yards and ships; the contractors to be allowed a percentage of profit over - the actual cost of the construction as their fee, subject to penalty in case the actual cost exceeded the basic cost _by too wide a margin. But a minimum fee is guaranteed, so that the contractor is sure of some return even if 'the actual cost exceeds the basic cost by a wider margin than provided, except- ing in the case of gross carelessness. On the other hand, a system of bonuses has been instituted so that if the actual cost is lower than the estimated basic cost, the contractor will profit accord- ingly. The minimum fee to the con- tractor would be about 32/3 per cent of the basic cost. The normal fee would be about 5% per cent. The American International Corp. has contracts for 120 steel ships whose cost is placed at $173,250,000. On the basis of the minimum fee of 32/3 per cent, this company's profit would be about $6,000,000. Admiral Bowles, of the Emergency Fleet corporation testifying in the senate investigation, stated that the American International Corp.'s profit would be about $6,000,000. When asked what it was supplying in return for this sum, since the government replied that the corporation was supply- ing the organization and the "know is contractor for the plant in_ furnishes capital and material, Admiral Bowles THE MARINE REVIEW how." After the war, the value of the yards will be appraised and the contrac- tors will have the option of buying them. If they do not care to do so, the yards will revert to the government as _ sal- vage. The American International Corp. owns the site of the Hog Island, Pa., plant, valued at $2,000,000. If this plant reverts to the government the $2,- 000,000 will be paid the company. The Submarine Boat Corp. has a 14-year lease on its site. The Merchants Ship- building Corp. owns part of the site at Bristol. Part is leased by the govern- ment. There are said to be some legal tangles in this matter that will have to be straightened out later. : According to figures of the construc- tion department of the Fleet corpora- tion, 1427 ships are under construction or contract. Of this total, 58 are com- posite ships, which are steel framed with a wood covering; these will give 207,000 tons at a cost of $27,732,000 or an average of $133.97 a ton. The data on 557 steel ships of 3,914,200 tons shows that their total cost will be $651,- 627,046, or an average price of $166.48 a ton. Of wooden ships complete with machinery, 65 are contracted for, total- 'ing 243,900 tons at a total cost of $34,- 070,000 or an average ton cost of $136.69. The investment public at large has not been called upon to finance this gigantic work. The money bags of Uncle Sam have been paying out the cash. Some private capital is being employed, but the amount is small for the volume of business. Prior to the war, the ship- building industry was only a stray dog in the financial field. Private capital shunned the industry. It would have been almost as easy to sell stock in a midatlantic gold mine as to finance a new shipbuilding venture. The investor put a mental stamp "gold brick" upon any suggestion that he invest his money in a shipyard. There were reasons for this condition. Adverse legislation de- vised by. provincial lawmakers, who could not grasp the importance of a merchant marine, had almost stifled the industry. There were a few old estab- lished coast companies, for the most part closely held and _ conservatively managed, which were able to eke out an existence from the meager demand for American-built cargo ships together with an occasional slice of the government's naval programs. The industry plodded along, launched its half million dead- weight tons of shipping a year and the stars and stripes were gradually be- coming as extinct in many ports as the great auk. But the war has changed all _ this. America once more raises her head among the leading maritime powers. If the struggle continues. as long as some prophets predict, more ships will fly the stars and stripes than any other em- cisive fashion. and Chester February, 1918 blem. The supremacy won in the Na- poleonic wars and lost in the civil war, after 50 years is being regained. But this supremacy, once regained, must be | retained. The shipping and shipbuilding industry must have the good will and support of the entire American public. It must have the finaricial support of the investment public, for some time peace will return and business will be diverted to normal standards. Then capital will no longer have reason to shun the shipbuilding field. The importance of an American mer- chant .marine as a national institution has been brought home to the American people these last nine months in a de- The citizen of the great middle west is as wide awake to the need for the maintenance of this in- stitution as his brother of the coast. If statutes now on the books militate against such maintenance, these. statutes will be repealed. Capital need no longer turn the cold shoulder to the shipbuilding industry. Future Financial Support The bell-wethers of American money power are already indicating their faith in the future of shipbuilding. There is the American International Corp., with the hundreds of millions of the Na- tional City Bank of New York, behind it. There is the mighty strength of the Harriman interests in. the Merchants Shipbuilding companies. There is the United States Steel cor- poration, with its tremendous resources, backing. the Federal and Chickasaw Shipbuilding companies. There is the powerful Bethlehem Steel corporation with its merger of five big shipbuilding plants. Then there are scores of others of prestige and influence which are bending their backs to the task of re- habilitating our shipbuilding industry. Their efforts will not cease with the winning of the war, for their interest in this field has been aroused as _ never before. With-such leaders, the finan- cial future of the American shipbuilding industry is assured. Japanese Company to Build More Ships The following from the Japan Chron- ticle is given out by Consul General Scidmore at Yokohama. The Nippon Yusen Kaisha authorities are reported to plan an increase in the subscribed capital of the company from, 44 000,000 yen ($21,934,000) to 100,000,000 yen ($49,850,000). The company intends to build 50 vessels, principally freighters. These vessels will aggregate about 400,- 000 tons. The plan is said to be based on a permanent subsidy from the Jap- anese government. "The plan is designed to prepare the company for after-the- war competition.